New Nevada Lawsuit Claims Illegal Online Gambling Site Skillz Cheated Card Game Players
Two plaintiffs filed a lawsuit in the United States District Court in Nevada concerning an “illegal gambling racket,” an online gambling site offering real-money card games in Nevada and Texas.
The name of the company is Skillz, and its owner is Andrew Paradise.
Not only does this site offer real-money online card games, the plaintiffs accuse its owner of cheating players. One 19-year-old female plaintiff claims the site refused to pay her the $28K in her account and the $650K she lost to a cheating player. The male plaintiff alleges he won a Porsche Boxster on the site and $286K in cash, none of which the site paid to him. He also claims to have lost $950K to against a cheating player.
The plaintiffs claim “fraud in connection with illegal operation of a gambling racket” and demand a jury trial, along with $5.9 million.
Parties and Jurisdiction
The plaintiffs are Alyssa Ball of Nevada and John Prignano of Texas. Mac VerStandig of the VerStandig Law Firm represents both of them.
The defendant is Skillz Inc. Its founder and CEO, Andrew Paradise, operates out of California but maintains a Nevada office. The company is registered in Delaware.
Ball, the initial plaintiff, resides in and played from Clark County, Nevada. Thus, VerStandig filed the case in Nevada.
What is Skillz?
Skillz is an app that operates on a platform for players around the world. Many of the games involve cards, and they can be played in cash game or tournament formats.
On the surface, the game looks like a play-money gaming site. Players simply purchase a virtual currency with which to play, according to affiliates. This is akin to game tokens of fun-money. But players can win real cash and prizes.
Skillz apparently matches players by skill level, thus determining which players compete against each other in various games.
It should be noted that the Skillz website notes that players can compete with other players “for either real cash or our virtual currency, Z.” And once a player makes a real-money cash deposit using processors like PayPal, “you can use that money to enter cash tournaments and win real cash prizes. You can then withdraw your winnings any time.”
Skillz makes its money by charging rake or fees in card games. The FAQ says it costs “as little as “$0.60 to enter” tournaments,” though there are freerolls as well.
The app offers two sections of games, one showing “puzzle” games like Sudoku, Minesweeper, jigsaw puzzles. The other is the “card” game category with everything from solitaire variations to gin rummy, hearts, bridge, and games that seem to be carbon copies of Chinese poker.
Legality Question
One might wonder how this real-money card game platform operates from and in the United States – even in Nevada – where the laws about online poker are extremely specific and restrictive.
Skillz addresses that issue on its website and claims skill is the reason it is legal.
“Skillz cash tournaments are not gambling because all of our competitions are based on ability, rather than luck or chance. True to its name, Skillz hosts games where players’ skill determines the winner of each tournament. Skillz does not profit on the outcome of a tournament and has no vested interest in who wins or loses.
“Games of skill have long offered participants a chance to compete based on one’s ability. Cash competitions have a well-established legal, social, and commercial precedent that span everything from classic board games to major sports tournaments.
“The Skillz platform advances this trend by providing skill-based gameplay on mobile devices, letting gamers win real money. Skillz uses sophisticated algorithms to determine that the winners of Skillz games are determined by ability, not by chance.”
Plaintiff Ball’s Allegations
Alyssa Ball started playing on Skillz in August 2019 when she downloaded it from Apple’s App Store. She initially lost approximately $50K playing 21 Blitz. However, she studied the game, formed strategies, and became a profitable player at the high-stakes games.
In some of her games against a player named “John Doe” for the purpose of the lawsuit, Ball determined that Doe manipulated the 21 Blitz app to cheat. She informed Skillz, which warned the cheater to stop it. Instead of banning the player per the company’s terms of service, they told him, “Please consider this your only warning, I can reopen your main account, but you must write back explicitly agreeing to our Terms of Service.”
After that time, Ball lost approximately $650K to John Doe.
Ball took her complaint to Skillz and requested a refund, but the site declined. Subsequently, Skillz suspended Ball’s account to verify her identity and examine her play. Upon Ball providing that proof, Skillz chose to keep her account suspended.
That sent Ball in search of the company’s CEO, Andrew Paradise. She found him on Instagram, and he accepted her friend request with a comment:
“Have we met somewhere? I feel like I’d remember as you’re too beautiful to be forgettable. Haha and if we haven’t met, we should, I’m in Vegas all the time.”
As Ball introduced herself as a Skillz customer and indicated her age as 19, Paradise responded that he was 37 and asked if she liked older guys. Ball tried to redirect the conversation to her account suspension, but he postponed any further conversation on the basis that his “team” was concerned she was “part of a ring of known cheating/fraud people.”
Skillz then terminated Ball’s account and seized her $28K balance.
Plaintiff Prignano’s Allegations
John Prignano started playing on Skillz in December 2018. He, too, focused on finding strategies for 21 Blitz, using his eSports gaming background. After initially losing $5K to $7K, he improved his skills and played more than 70,000 games at approximately several hundred dollars each.
His action on the site accumulated rewards points, eventually enough to exchange them for the Porsche.
Skillz, however, demanded that he earn more rewards points, told him it was a used car, and demanded verification of his play. Skillz then raised the number of points required for the Porsche without notifying customers.
Prignano never received the Porsche. In addition, Skillz seized his account balance of $286K. They accused Prignano, as they did with Ball, of cheating in the games.
In addition, Prignano played against John Doe and claimed he was cheated to the tune of approximately $950K in entry fees. He also lost $100K to another alleged cheater called John Doe 2 in this case and $250K to John Doe 3.
List of Counts Against Skillz
The lawsuit lists the counts against Skillz as follows:
–Count 1: Consumer Fraud (False Representation) by Ball
–Count 2: Consumer Fraud (Violation of Statute) by Ball
–Count 3: Fraud by Ball and Prignano
–Count 4: Negligent Misrepresentation by Ball and Prignano
–Count 5: Negligence Per Se by Ball
–Count 6: Negligence Per Se by Prignano
–Count 7: Negligent Misrepresentation by Prignano
–Count 8: Unjust Enrichment by Ball and Prignano
–Count 9: Declaratory Judgment by Ball and Prignano
Response Deadline Extended
The plaintiffs served the summons to the defendant on May 17, which put the response due date at June 10. However, Skillz requested an additional month to respond.
US Magistrate Judge Brenda Weksler did grant the extension. Skillz now must file its response to the complaint by July 10.
Fairness is core to our identity at Skillz. We are committed to a world where everyone has the opportunity to embrace their inner champion, and we stand with those calling for change.
— andrew paradise (@andrewparadise) June 1, 2020
Statements from Both Parties
A spokesperson from Skillz reached out in response to this article with the following statement:
“This suit was filed by two people who colluded to cheat the Skillz community. They were caught by our trust & safety team and kicked off of our platform in accordance with our terms of service and commitment to honesty, integrity and fairness. Their case has no merit and is an attempt to intimidate our company and obtain illegitimate gains. We will defend ourselves vigorously and are evaluating all legal remedies to protect our community.”
VerStandig also provided this statement on behalf of the plaintiffs:
“There is an inherently troubling aspect to the manner in which Skillz and its personnel have conducted themselves – and, indeed, the very business model they propagate. The allegations in this case are a reminder why the legislatures of multiple states have elected to render gaming such a heavily regulated industry, and of the potential harms that can occur in the absence of such regulatory oversight. We look forward to pursuing our case in court and have faith in the judicial system.”
